FACTS : - The Zorastrian Building Society Ltd., Bombay, (assessee), owned certain buildings which were let out to tenants. For the assessment year 1951-52 the Income-tax Officer disallowed deduction on account of urban immoveable property tax on the ground that it was, tax levied by the Bombay Government and not by the local authority. The assessees case was that the Urban immoveable property tax was levied and collected by the Municipality and paid to the Provincial Government and that, therefore, it was entitled to deduction under the second proviso to S.9(2) of the Indian Income-tax Act, 1922. On appeal the Appellate Assistant Commissioner upheld the Income-tax Officer.

2. The Appellate Tribunal upheld the contention of the assessee.

3. The following question of law was referred to the High Court:

"Whether on the facts of the case the assessee is entitled to claim deduction of half of the urban immoveable property tax under the third proviso to S.9(2) of the Income-tax Act from its income from property?"

CHAGLA, C.J. :-

4. The question that arises in this reference is whether the assessee is entitled to deduct half the urban immoveable property tax for the purpose of determ